A non-recourse mortgage is a type of loan where the lender's ability to claim repayment in the event of a default is limited to the collateral pledged for the loan. In other words, if the borrower defaults on a non-recourse mortgage, the lender can only take possession of the assets used as collateral and not any other assets of the borrower. This is a key feature of non-recourse loans and distinguishes them from recourse loans, where the lender can go after the borrower's other assets if the collateral is insufficient to cover the outstanding loan balance. Non-recourse loans are less risky for borrowers, but more risky for lenders, as they may not be able to recover the full amount of the loan if the value of the collateral falls. As such, non-recourse loans often come with higher interest rates or more stringent lending criteria to compensate for this increased risk.

Choice A is incorrect. A non-recourse mortgage limits the lender in terms of the assets they can possess in case the borrower defaults on the loan, the lender has few chances of reducing the risks associated with the loan, and therefore they tend to charge fixed-interest rates.